SECRETARY RAY MABUS: One of the things that has always amazed and gratified me is the talent of people who are willing to serve in government, willing to take less money, more trouble on behalf of their country. Every time we seem to need somebody, somebody good – you hope – steps forward.

We have a great secretary of defense right now in Bob Gates, but we sure had a great one in Bill Perry. He is a national treasure, and I almost want to put a little fence up around him to make sure that we keep utilizing the amazing talent that he brings to everything that he does. And so, it is the – I feel absolutely untalented following Bill Perry. And in this group I can almost guarantee you that I’ll be the least talented person that stands up here before you. But thank you so much, Secretary Perry. Thank you.

And, Arun, thank you for your work and for allowing me to speak here today. I’m honored to be a part of this summit and to share this podium with some of the best minds and best leaders in energy innovation in our nation. And I’m really happy to be here to talk about something that I deeply believe in, something I believe is right, and that’s changing the way we use, the way we produce, the way we acquire energy.

In this belief, ARPA-E is a kindred spirit with the Department of the Navy. It’s a vision that is shared not only by ARPA-E and Navy but by Steven Chu and by President Obama – creating an energy independent future and a new clean energy economy for our country.

To use your director’s own words, “Our dependence on fossil fuels severely threatens our national and environmental security due to our growing foreign energy independence. We as a nation need to change course with fierce urgency.” “Fierce urgency.” He’s exactly right. That’s why what ARPA-E does is so critically important for our country, for our military, for our economy.

Having an institution that’s focused on finding, researching and developing the next “eureka!” moments or the thousand more routine moments; finding technology that will change the way we work, you really can’t put a value on that.

The Navy and Marine Corps, the services I am privileged to lead, have always supported innovation and always led technological change. We have constantly searched for those technologies that would improve our capabilities and allow us to better defend this country.

This very week, 128 years ago, Congress authorized the ABCD ships, the first four ships of the Navy to be constructed completely out of steel. In the 1880s, this was a pretty revolutionary concept because for most people – and I probably would have been in that group in 1880 – it was difficult to get past the notion that steel sinks. (Laughter.) But it was the way that we power our ships that maybe best shows the Navy’s willingness to innovate.

In the 1850s, not long before we built the ABCD ships, the Navy changed from wind to coal. In the early part of the 20th century we changed again from coal to oil. In the 1950s, we pioneered nuclear as a manner of propulsion.

In every single case, in every one of these cases, there were naysayers that said, you’re trading one form of very proven energy for another form that we just don’t know if it’s going to work. It’s too expensive, it’s too hard, it’s too unproven. In fact, when we went from sail to coal, the uniformed leaders of the Navy objected, saying that sail had been proven for thousands of years; what were we doing?

Every single time there were naysayers. And every single time they were wrong. And I am absolutely confident that as we make our next change, as we lead again in changing the way we power our ships and our aircraft, that the naysayers who say it’s too expensive, the technology is just not there, are going to be proved wrong again because every time we’ve changed we’ve made us a better Navy. Every time we’ve changed, we’ve been better able to defend the United States.

I think that today we’re at the cusp of another one of these changes, one that will move us off of an over-reliance on a very fragile global oil infrastructure and toward alternative and renewable sources of energy. It’s a move that we absolutely have to make because changing the way we produce energy, changing the way we use energy is fundamentally about improving the national security of this country.

All you have to do is look at the headlines today. All you have to do is look at what is happening in the world. Our dependence on fossil fuels creates strategic operational and tactical vulnerabilities for our forces and makes them too susceptible to supply and price shocks caused by instability or natural disasters in volatile areas of the world where most of our fossil fuels are produced.

Now, we would never allow these regions to build our ships. We would never allow these folks to build our aircraft or our ground vehicles, but we give them a say on whether our ships sail, our aircraft fly or our ground vehicles work. The security and the economic costs to the Navy and Marine Corps of using fossil fuels are significant.

When the price of oil goes up, the price of defending this country goes up. Every dollar – every dollar that a barrel of oil goes up in price, the Navy spends $31 million more for fuel. So, if the price goes up $30 a barrel, which it has more than once in the last decade, that’s a billion dollars – a billion dollars that we can’t use for other things, a billion dollars that we can’t budget for, a billion dollars that goes just to power the ships and aircraft and ground vehicles that we have.

Now, that’s sort of the strategic and economic argument for change but there’s a different and more personal reason. It’s the sailors and Marines in the field and how our dependence puts them at risk. In Afghanistan, the thing we import the most – the single thing that we spend the most effort getting to Afghanistan is fuel. And just think about getting a gallon of gasoline to a Marine front-line unit in Helmand province in Afghanistan.

First you’ve got to put it on a ship and go across one ocean, the Pacific or the Atlantic. Then you have to take it either up through Pakistan or down through the Northern Distribution Network, through the Baltics and across Russia. And when you get to Afghanistan, you have to go across the Hindu Kush from the south or the Amu Darya River from the north.

There are huge financial costs associated with it, but maybe, more important, there are huge other costs. The Army did a study that for every 24 convoys we’d lose a soldier or a Marine, killed or wounded guarding that convoy. That’s a high price to pay for fuel.

And we keep those Marines, those sailors, those soldiers, those airmen from doing what they were sent there to do, which is fight and engage and rebuild. So we have to find another way to do this. We have to find a different way to power the things we need to power.

And it’s for all those reasons that, in the fall of 2009, 17 months ago, I issued five energy goals for the Department of the Navy, for the Navy and the Marine Corps. The most important one is that by no later than 2020, no less than half of all the energy that the Navy and the Marine Corps uses afloat and ashore will come from non-fossil fuel sources. Also, by that same date of 2020, at least half our bases will be net zero in terms of energy consumption, and in a lot of cases, those bases are going to be returning power to the grid instead of pulling power off of it.

I think it’s important, though, to say that we’re not just changing for change sake. Everything that we’re doing is to make us better fighters and to make us more secure. Every time we make a change that improves the efficiencies of our engines or our systems, every time we move to an alternate source of power – every time – we get better and we make people safer.

We’re already seeing the results. Right before Christmas I went to Afghanistan, and one of the first forward operating bases that I flew into was Sangin. And when we flew in, there was a firefight going on about 500 yards away because some of the toughest fighting that’s going on for the Marines and all over Afghanistan is in Sangin. They’re fighting almost every day. But there were also 3rd Battalion, 5th Marines who went into Sangin; also the first Marines that we sent in with some alternate power units.

Now, the Marines have led in this, as they do in a lot of things, and they’ve set up two experimental forward-operating bases, one at Quantico, Virginia; one at Twentynine Palms, California. And they’re looking for ways to get powered differently in the field. Well, when the 3rd of the 5th left, going to Afghanistan, they basically gave them some of the stuff that they’ve been working on and said, try this out; see it if helps you.

And the 3rd Battalion, 5th Marines go in Sangin into heavy combat, and at the same time are trying some of these alternative ways to get fuel, to get power, and some amazing things happened. Their fossil fuel usage has gone down 20 percent, even though they weren’t given a whole lot of training on the things that they were taking, and even though they were in the fight.

One of the larger solar systems they took is being used to power their operations center. And across the battalion operating areas there are a lot of man-portable systems. They’ve got these flexible solar panels they roll up, stick them in the back of their pack, and take to charge their radios and their small electronics. And because of doing this, a foot patrol is able to operate without 700 pounds of batteries – 700 pounds that they don’t have to hump over the mountains, across the rivers and into the fight in Afghanistan.

Now, at sea we’re trying to do some of the same things. One example is the first hybrid ship, what Tom Friedman called the “Prius of the seas.” But if you see it, it’s a big-deck amphibious ship, the USS Makin Island, the biggest amphibious type that we have. It uses a hybrid drive and uses and electric drive for speeds of under 12 knots and it comes with a lot of benefits.

The first thing, on its first voyage from Pascagoula, Mississippi, my home state, around to its home port – it went around South America to San Diego – it saved almost $2 million in fuel. And at current fuel prices, over the lifetime of that ship it’s going to save a quarter of a billion dollars in fuel.

Second, the less time we have to refuel on it or any other ship, the more time we get to patrol, do what we’re supposed to do, giving our commanders a lot more flexibility and a lot more time on station if they need it.

And, finally, just by reducing the frequency of refueling operations, we make our ships safer. The Cole was in Aden to get fuel when it was attacked in 2001.

But there are still a whole lot of challenges that we’re facing for our installations, our ships and our forward operating bases. Our ships – the systems that we use and the power requirements that they have are getting bigger all the time. Every system we’re putting on a ship now or in an aircraft is in some ways sort of a power hog. Just like the commercial world, the march of technology in the military has created an ever-increasing appetite for energy.

A Marine platoon in Vietnam took two or three radios on patrol with them. A Marine platoon in Afghanistan takes 30 to 50 radios on patrol with them. On our ships, high-tech radar systems and missile defense technologies and advanced gun systems use and need a lot of energy.

The ability to maintain steady, uninterrupted power, even if damaged, becomes absolutely critical for the success of these ships. But what we don’t have and what we need is the ability to store the energy that we create to be able to use it when we need it, to be able to use it where we need it. Ashore, the question is the same: How do you store the energy? How do you keep the energy that you make when you don’t always make it when or exactly where you need it?

And it’s for these reasons and addressing these challenges with the underlying goal, again, of making us better fighters, that today, on behalf of the secretary of defense and the secretary of energy, I am very happy to announce a partnership between DOD and ARPA-E on two energy storage initiatives that, once they are successful, will improve the way our military uses energy.

The first initiative – actually, the first initiative ought to be one to keep my voice. (Laughter.) (Clears throat.) I had my first hearing yesterday in Congress. I’m going to – on the budget. I may blame that. The first initiative – is this a great job or what? (Laughter.) You know, if I ever leave this job, I’m just going to be helpless. (Laughter.) Thank you so much.

The first initiative is a program that will develop and build hybrid energy storage modules to provide long endurance, high-energy density materials in a small, modular and easily scalable package. The program’s goals are to extent current levels of fuel duration by up to 30 percent while concurrently providing for batteries that rapidly charge and discharge big amounts of energy.

The applications of this technology can be incredible. Right now a lot of the power that I talked about that the Marines in Sangin are generating are going to waste if their equipment is not hooked up to the chargers, if energy is just being made and doing nothing. But with this hybrid energy storage module, we’ll be able to store that energy for use at almost any time, and do so by building expeditionary, tactical energy distribution networks from individual modules. This means fewer Marines guarding convoys, less money, less effort getting fuel to the battlefield.

On the seas in the maritime environment, hybrid energy storage modules can provide us with efficient and stable power for our weapons systems, and in case of battle damage, they will give us the time we need to get those systems repaired, to get them online – back online and keep fighting.

They’re also a critical step toward solving one of the shipboard integration challenges associated with the development of electric weapons, things like rail guns, things like directed energy weapons. These require huge amounts of power, which have to be rapidly discharged to make them work right. Right now we’re working on doing that repeatedly and reliably, and energy storage is a big part of that solution.

Beginning in fiscal year ’12, DOD and ARPA-E have requested about $25 million each to do this, to do this research. Now, $25 (million) is the cost of one – each one helicopter. The change that that 25 million (dollars) from DOD and the 25 million (dollars) from ARPA-E can generate, can multiply that one helicopter hundreds and thousands of times. That’s the first project.

The second one that I want to announce will fund a grid storage study to evaluate how to improve our energy reliability, prevent disrupting our service, and improve energy security on more than 500 DOD installations worldwide through a large-scale storage of energy.

You think of the Navy as being a seagoing service, and we are, but the Navy and Marine Corps also has 3.3 million acres of land and 72,500 buildings. We need reliable energy onshore too. This project, the second project, would leverage the experience of ARPA-E’s GRIDS program, which is funding technology that has a potential to balance short-term availability in renewable energy generation.

This grid storage study is a first step toward answering some of the technical challenges that I outlined earlier: How do we create stable delivery of renewable energy from power sources like solar or like wind that are as variable and sometimes as inconsistent as, I don’t know, the weather?

Both of these joint projects have a lot of promise, both have a lot of potential, and both create tremendous opportunities for civilian power applications. Through DARPA-E’s (sic) innovation, DOD can and will serve as a transition agent, moving the technology from R&D to practical application and development. We have some amount of experience doing just that. You only have to look as far as the Internet or GPS or even flat-screen TVs to see how DOD has been a transition agent for technology.

These two joint initiatives will complement the existing partnership that we have between DOD and DOE, as well as the host of initiatives that Defense and the services are undertaking to change the way we use, produce, and acquire energy.

For the Navy and Marine Corps in particular, we look forward to developing these new technologies. That’s who we are. For 235 years we have grown, we have adapted, and we have changed to address the ever-shifting requirements of a fluid and increasingly complex world. That is what we have to do with energy – innovate, adapt, overcome, and emerge victorious on the other side.